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11.09.11

Berlusconi Bumbles Out

Italian Prime Minister Silvio Berlusconi loses support in Parliament and promises he will resign—but a period of instability will likely follow.

Italy’s embattled Prime Minister Silvio Berlusconi has confirmed that he will resign, bringing to an end a controversial three and a half years in power. But instead of celebrating in the streets, Italians are more uncertain of their future than ever.

The days preceding Berlusconi’s demise seemed full of foreboding, not only for the prime minister but also for the whole country. After coming under fire at last week’s G20 meeting in Cannes, Italy’s dire economic situation emerged as the single biggest threat to the continuation of the European Union’s economic stability. Markets echoed the political angst, with Italy’s 10-year bond rates perilously close to the 7 percent mark, a point at which Italy could effectively risk defaulting on its $2.6 trillion debt load.

Berlusconi’s inability to push forward harsh austerity measures took center stage in Cannes, and the prime minister, usually confident, appeared isolated and marginalized at the important confab. Berlusconi returned to Italy like a child who had been sent to the corner for punishment. He spent the weekend huddled with increasingly hard-to-please supporters who were privately floating the idea that perhaps he had reached his political sell-by date. Meanwhile, tens of thousands of opposition protesters took to the streets of Rome on Saturday, waving flags touting “Basta,” or “enough.” On Monday, many of his key allies left his fold, some saying publicly for the first time that Berlusconi should resign for the good of the country. After resorting to posting on his Facebook page to try to quell the rumors of a resignation, he braced for what was to be a grueling test of his staying power on Tuesday.

A thunderstorm cast a dark cloud over Rome on Tuesday, before dumping torrential rain over the city just as parliamentarians made their way to the chambers to debate and then vote on a finance bill. It was not a confidence vote per se, but it was viewed as a referendum on Berlusconi’s ability to govern. The opposition parliamentarians chose to abstain from the ballot rather than vote against it since it was actually a vital piece of legislation, especially given the importance of Italy’s economic rehabilitation efforts. The measure itself passed the lower house of Parliament, but it won with 308 votes and Berlusconi needed 316 to maintain his majority. In effect, it was a major insult—a crucial personal loss masked by the passing of his own financial legislation for the good of the country.

After crisis meetings with his key allies after the vote, he made his way to the Quirinale Palace to meet Italy’s ceremonial president, Giorgio Napolitano. After a brief meeting, his motorcade whisked him away without a word, leaving the president to issue a statement breaking the news of Berlusconi’s pledged resignation. Only later did he take to his own television station’s airwaves to confirm the news. “The government no longer has a majority,” he conceded. “I will hand in my resignation after we pass the budget and stability measures dictated by the European Union."

Therein lies the complication. Berlusconi’s pledge of resignation hinges on both chambers of Parliament passing the 2012 budget and all the austerity measures the budget includes, which he says will be done by mid-November or early December at the latest. Under the agreement with Napolitano, he will then get to resign rather than being voted out on a confidence vote. Resignation is a far more dignified exit for Berlusconi, who has led the country down its wayward path for the better part of 18 years (he has been prime minister three times). By being allowed to pass the budget and the necessary austerity measures, analysts say he will also leave something of a legacy beyond just his so-called bunga-bunga sex parties and call-girl scandals.

But in attempting to pass the austerity measures, he also risks something of a double jeopardy. Political pundits say he could actually lose the budget and austerity vote and be forced to call a confidence vote after all. No matter what happens, however, the Berlusconi era is soon to be over—at least for now.

“The government no longer has a majority,” Berlusconi conceded. “I will hand in my resignation after we pass the budget and stability measures dictated by the European Union.”

But what follows is bound to be a period of serious uncertainty in Italy, which is right now at its most vulnerable moment in its postwar history. Berlusconi says he hopes for early elections after his resignation rather than a technocratic or caretaker stop-gap government. “It’s the only option,” he said. “The Parliament is paralyzed.”

But early elections, which could come as early as January, could be catastrophic. The opposition is fractured and its leaders weak, setting the stage for a very possible election win by the center-right, which could effectively prolong the Berlusconi era, at least in the short term. No matter how or when he finally leaves office, nothing so far prohibits Berlusconi from running in those elections. But an unstable or unprepared government elected in a moment of panic could possibly be more destabilizing than even an instant Berlusconi comeback. Instability and a return to Italy’s years of short-term cascading governments could actually vault the country into further chaos, which is particularly worrying to those watching the European Union’s financial health. The only thing certain in Italy right now is the inevitable uncertainty to come.